As some Missourians prepare to participate in the state’s new recreational marijuana economy, growers are hard at work, trying to stock the dispensaries with enough pot for the industry’s expanding customer base.
With so many moving parts, it’s hard to put a pin on exactly what day marijuana will be available for recreational use, but the industry and the state Division of Cannabis Regulation are gunning for early February.
Southwest Missouri-based Flora Farms, a cannabis company with three dispensaries, including one in Springfield, has been planning the rollout for months, and its CEO is confident in their ability to hit the ground running as soon as they can add recreational users to their market.
Locals share what cultivators are doing – and have done – to increase production
The process from “seed to sale” is about six months, according to Mark Hendren, the CEO of Flora Farms. The timeline between Nov. 8, when Amendment 3 passed with about 53 percent of the vote, to the early February projected rollout of recreational marijuana is roughly four months.
While Flora Farms didn’t know exactly what would happen to the Amendment on Election Day, they prepared themselves for Missouri’s eventual “Yes” vote.
“We have been gearing up toward this for months,” Hendren said. “Flora Farms has three licenses, which is the maximum allowable under the current rules, which allows us to have up to … a grand total of 90,000 [square feet of flowering canopy]. We currently have space for about two-thirds of that, and we are ramping up that capacity right now.”
They presently operate two buildings and are 50 percent done, with a third in Humansville, where the company’s cultivation operations are anchored. And in addition to three dispensaries, they operate a marijuana-infused product facility in Springfield. It has only been in operation for about six months, and they intend to ramp up its production capacity.
David Brodsky, a part owner and the director of retail for The Farmer’s Wife, a southern Missouri dispensary chain with a location in Springfield, is not a cultivator himself. But he is familiar with the planning-ahead process of Flora Farms.
Brodsky outlined three primary paths for cultivation facilities during the transition from medical to medical-plus-recreational cannabis.
The least common of the three is cultivation facilities already producing at maximum capacity. The remaining businesses, according to Brodsky, have held off on fully building out facilities or have the building complete but are not growing anywhere close to full capacity yet.
“A lot of these guys are only operating at 30 percent capacity,” he said. “That’s the more common theme right now.”
Brodsky said how much marijuana that’s being harvested compared to how much was getting shipped out to dispensaries has been lopsided since November 2021, and at one point, cultivators were producing about twice as much as the market share.
“As [new cultivators] came online throughout the remainder of 2022, they’re all looking at that data and seeing all the other operators kind of having some stockpile up,” Brodsky said. “And a lot of them said, ‘We’re not gonna go full tilt right out of the gate.’”
Hendren expressed subdued confidence that Flora Farm’s stockpile would be sufficient for the rollout of recreational adult use.
“We anticipate having enough,” Hendren said before indicating it was hard to determine exactly how much product they would need. “We don’t know what ‘enough’ means. I mean, all we really know is what’s happened in other markets, other states that have gone through the same process.”
Similar markets could aid predictions for Missouri’s marijuana industry
Missouri could be in for a seismic increase in marijuana sales when consumers are able to purchase for recreational use.
“The most comparable state to Missouri is probably Arizona,” Hendren said.
Arizona, which legalized medical cannabis in 2010 and recreational usage in 2021, eventually saw recreational marijuana sales outpace medical sales by nearly “2.5 to 3 times as much.”
The recreational market was initially slow but has since outpaced its medical counterpart by wide margins. Hendren wasn’t far off — in September of this year, medical cannabis sales in Arizona topped off at $30.9 million compared to a whopping $68.7 million in recreational sales, according to the Arizona Department of Revenue.
“So that’s kind of where we’re planning,” Hendren said. “There’s all kinds of speculation out there what the numbers will be, but really just time will tell.”
However, the gap between medical and recreational usage is much larger in Missouri than it was during the same timeframe in Arizona.
For comparison, Arizona had just shy of 70,000 qualified medical marijuana patients in 2014, four years after the Arizona Medical Marijuana Act was passed, according to the state’s Department of Health Services. Meanwhile, Missouri has over 197,000 medical marijuana users as of October of this year, according to the DHSS, four years after the passage of Amendment 2.
Brodsky credited the DHSS for their ability to get the Missouri medical marijuana program up and running faster than other markets.
“Our sales and our patient counts have increased much faster than they have in other states,” Brodsky said. “And they seem to be taking the adult use rollout very seriously. I think they have learned not only from other states, but I think they’ve learned a lot in the last year.”
While there are certainly other factors to consider in the discrepancies between these numbers, 130,000 people is a sizable difference.
Even as some industry professionals, including Brodsky, urge medical marijuana cardholders to continue holding onto — and renewing — their cards for a number of reasons, including tax incentives, it’s only a matter of time before recreational usage surpasses medical sales.
“Based on what we’ve seen happen in other states, … I imagine sometime in the first 12 months, we will see more recreational sales than medical sales,” Brodsky said.
More pot, more jobs. Every part of industry expected to expand workforce
Across the dispensaries, cultivation facilities, and infused-product manufacturing facilities — along with the management of new licensees to the regulatory side of things — the expansion of the marijuana industry in Missouri could bring on hundreds of new employees.
Companywide, Flora Farms has about 170 employees, according to Hendren, and they plan on bringing on 40 to 50 more within the next couple of months.
With the transition into a new role for Lyndall Fraker, Missouri’s director of the medical marijuana section of the DHSS, the Department has posted a job for division director to lead the newly-named Division of Cannabis Regulation. Additionally, they plan to hire up to 100 employees to a staff currently comprised of 57 to operate the marijuana program’s expanding workload, according to the Springfield Business Journal.
The Farmer’s Wife, which only operates on a retail front, has plans to hire up to eight additional employees as they seek to expand and add a fourth location in Bolivar.
Despite industry’s confidence, supply shortages a short-term possibility
Despite Brodsky and Hendren’s assurances that they were ready to roll out recreational marijuana, they weren’t afraid to admit it could be a mad dash to the finish line, potentially with a few, albeit minor, issues along the way.
“Everybody’s been stocking up, and now we’re all trying to make plans and get ready for the adult use world,” Hendren said. “So everybody’s scrambling to make sure their facilities are ready, making sure that personnel are ready and trained.”
Brodsky is prepared for potential setbacks in the early stages of recreational adult use, but expects them to resolve quickly.
“I think we’ll see a small little bump,” Brodsky said. “There will be a short, small supply crunch for sure in the first month or two, but that’s gonna level out very quickly. … I think the market for the industry is much more ready than folks might think.”
